Oil: speculators broke up the net position to the peaks of April

The Commodity Futures Trading Commission (CFTC) COT (Commitments of Traders) reports for the week ending on Tuesday last week showed:

Non-commercial large speculators increased their net buying position on oil contracts by 19.1 thousand contracts to 225.2 thousand, marking the fourth consecutive week of net buying. This is the highest net position since April 25.

Hedgers (COMMERCIAL) saw a 17.5 thousand contract increase in their net selling position on oil contracts, bringing the total to 251 thousand. This marks the fourth consecutive week of increased net selling for Hedgers-operators.

The number of open contracts decreased by 25 thousand, bringing the total to 1.744 million.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators increased by 0.45 over the week, bringing it up to 2.80.

The data from COT oil reflects a growing bullish sentiment among traders. For the past month, they have been increasing their net position as prices have risen from multi-year lows. This net position is now the highest it has been in the last three months. Additionally, large funds have reduced their sales by 18% in the last week. If this trend continues, it could lead to an increase in oil prices.

Large speculators reduced sales, which may have been caused by the monthly expiration of futures contracts.

WTI

COT report data is essential for medium and long-term trading, and is mainly used by large speculators, NON-COMMERCIAL (banks, investment funds). These traders usually follow the trend (blue line). Small speculators, NONREPORTABLE POSITIONS, however, have little impact on the market (red line). Hedgers, COMMERCIAL (operators, large companies) usually go against the trend (black line). The net position is the difference between the number of buy and sell contracts, while open interest is the total of all open positions in the market.